A simpler explanation of rolling positions is: the bold thrive, while the timid starve.
Rolling Position Technique: In 2018, I know it was just one market wave, and two people got rich using this technique~ It's true that just one market wave can lead to wealth, but more often, it ends in failure.
To put it bluntly, for rolling positions, many futures traders like to casually talk about it without looking at the market, whether to roll positions is just based on their mood... The two good rolling position opportunities in 2018 were in April for EOS and the subsequent BCH surge.
If the rolling position fails once, it's all over. No matter how much you earned before, one failure means it's all over; the key is that rolling positions can constantly put you in a disadvantageous position.
The difficulty lies in the judgment of the big market. Enough talk, let's detail how to use the rolling position technique and how to judge it.
The literal meaning of rolling positions is to keep rotating your positions. Let's take an example; when EOS is at 2 USD, we judge that a big market is coming, and we believe EOS will reach 1000 RMB!!!!
So I choose to go long on EOS at $2, suppose I use 100 EOS. With 20x leverage. When EOS reaches $2.1, I already have 200 EOS, at which point I choose to close the position. Then I use 200 EOS to go long at $2.1. When EOS reaches about $2.205, I have 400 EOS... and keep rolling like this~ No joke, when EOS hasn't reached 1000, when EOS is at 150, how much money do you have? Scary, right? This only assumes a principal of 100 EOS.
For regular futures, when EOS reaches $2.205, you have about 300 EOS. This has already opened a gap of 100 EOS, and we have only rolled the position once. Now everyone knows how high the compound returns are.
Of course, it comes with enormous risk!!!!!! Suppose: We start with 100 positions of $2 long on EOS and keep rolling the position. When EOS reaches 150 RMB each!!! While we're fantasizing about a bright future, we hold an uncountable amount of EOS and decide to go long again at 150, after all, EOS is supposed to reach 1000 each in 2018. Suddenly: the momentum stops~ the star aura disappears~ and it crashes. In a bull market, your mind is filled with fantasies, and if you're not careful... it's all over. All success is wasted.
Regular Futures: Starting from $2, even if it drops, when it reaches 150 and then falls, there is still significant room and time to take profits!!! And it's not a small amount, just less than rolling positions!
Rolling positions are like this; one mistake can lead to irreversible consequences~ Of course, you might say, what if I judge the market correctly? Such market conditions only occur in extreme situations, meaning during a bull market or a single coin flight~ Don't try to argue with me, what about continuous declines, going short and rolling positions? I reiterate my point, continuous declines, for me, aren't a bear market, it's a bull market! It's just a bull market that doesn't belong to the retail investors.
Single Coin Flight~ I personally witnessed a retail investor get rich from a BCH wave... He really knew nothing, just simply asked me about rolling positions, even though he opened with a negative of over 40%, he didn’t care, didn’t look... In the end, he rolled his position from 50,000 RMB to nearly 3 million in just a week... that was the time BCH took off.
Do you think his market judgment is amazing? No, he knows nothing, doesn't even look at candlesticks, just mindlessly rolls positions... He rolls until he sees a lot of money and has to settle. He only closes the position when he takes out the money to spend. Do you think someone can always judge the market correctly? Is there no mistake at all during the process? I don't believe it... There will always be mistakes.
So: Friendly advice: In a situation where market judgment is good, use rolling positions sparingly, roll 2 or 3 times, and take profits when you see them. If commodity futures are analogous to the spot of digital currencies, the risk is about the same. Then, digital currency futures are greater than digital currency spot! Rolling futures are still far greater than the risks of digital currency futures.
$$$BTC $$$EOS
"Teaching a person to fish is better than giving them fish." This was typed out during my break, cherish it while you go, more valuable insights need your "support to view, you can visit my homepage, follow me, and I will provide daily market analysis for everyone!"